Minutes of the
NIU Board of Trustees

The Chair welcomed the other members present, Trustee Grans, Chair Boey and Student Trustee Sosnowski. He congratulated the new Student Trustee on his newly acquired voting status saying that he is fulfilling a new role on behalf of students during his tenure on the Board. He also noted that there had been changes in committee assignments. Trustee Manny Sanchez is now vice chair of the Finance, Facilities and Operations Committee. Chair Raymond recognized University Advisory Committee representatives Andy Small and James Lockard. 

Board Chair Boey then made the following announcement. Because he has relocated his residence outside of Illinois, Trustee David Raymond has offered his resignation, which was accepted by the Governor effective September 18, 1998. Dave, you have been unfailing in your commitment to NIU and to the Board, and you will be greatly missed. We will properly recognize all your contributions to both the institution and the Board at the September 17 Board meeting. 

Chair Raymond said he thought it would be appropriate to let everybody know at the beginning of this meeting that it he was chairing his last Finance Committee meeting. He said he had notified Governor Edgar of his intention to resign after the September 17 Board meeting. As has been generally known, Chair Raymond said, I have moved out of Illinois to the Virginia suburbs of Washington, D.C. recently, and my term was scheduled to expire in January 1999. When I looked at the calendar, there was only one other Board meeting scheduled before the end of my term. So, I decided I could give up coming back to DeKalb and northern Illinois in December and resign to give the Governor an opportunity to appoint an Illinois resident to take my place who can get started on the important business of the Board. I've really appreciated and enjoyed my opportunity to be involved with higher education in Illinois and, in particular, to work on matters for Northern Illinois University. I think this has been an exciting time in the university, Chair Raymond said, with the establishment of this new governance system with a new independent board. It has really been a pleasure to be involved in getting it up and running. I think we have made some really important decisions for the future of the university for the first two and a half years of our existence, he said, and I have been glad to be a part of that. The West Campus development plan is a major decision for the future, as well as the acquisition of major parcels of real estate on the west side of the campus and the additional land in Hoffman Estates. We have been building and renovating a number of facilities and adopted a new tuition plan last year that is very innovative. We have established this whole new governance structure, and I think it has been operating in a very efficient and effective way over the last two and a half years. I am happy to see that our board has been working so well and so smoothly with all the other representatives of the university, including the faculty, the staff and the students. It has been a real pleasure to be a part of all of that. As you know, Chair Raymond said, I endowed a grant last year to give faculty resources for adopting uses of technology in teaching. One of my reasons for doing that was to have a continuing involvement with NIU, even after I leave the Board. As part of that program, I expect that I will be coming back at least once a year, in the spring, for the announcement of the new recipient of that grant. I look forward to staying in touch, the Chair said, and seeing how the future unfolds for NIU. 

Chair Boey stated that Governor Edgar had appointed Gary J. Skoien, of Inverness, to complete Trustee Raymond's term. Mr. Skoien is currently the Chairman and CEO of Horizon Group Properties of Chicago, a spin-off company of the Prime Group. He served for eight years, 1983 to 1991, as the Executive Director of Illinois' Capital Development Board, the agency responsible for overseeing major public construction projects, including those at Illinois colleges and universities. In 1991, Gary left the CDB to become the executive vice president and chief operating officer of the Prime Group Development Corporation, but continued to serve as a member of the board of CDB for another two years. In early December, Gary took his current position as the chairman of the Horizon Group Properties. It is with a great deal of mixed emotions that I personally hate to make this announcement, Board Chair Boey said, we will miss David greatly. But, we are fortunate in that it seems we have a replacement for David who will be as capable and effective.  

President La Tourette also extended appreciation to Trustee Raymond on the part of the university. The President said Trustee Raymond's relationship, not only with the Board, but with the university, had been outstanding. You have been unfailing in your availability and interest in the university, President La Tourette said, and this has not been interrupted at all by your move to Virginia and Washington. You have returned on every occasion that we scheduled a meeting. You have been available either by phone or in person to conduct important business for the university. Two and a half years have gone by very quickly. It seems only yesterday that we met in early January 1996 to establish the Board, President La Tourette said. I am amazed at how much we have been able to accomplish with the support and commitment of the Board for the best interests of the university and its service to students and other clients. The President said that as Trustee Raymond had indicated, we have established a very strong base for the future. With your help, the President told Trustee Raymond, this Board has established the structure, the image and the commitment the university needs from the Board of Trustees. So, I am, on a personal level, very sad that you will not be with us in this role after September 17. But I certainly appreciate the fact that you have made an investment in the university, not only as a member of the Trustees, President La Tourette said, but also your memory, your commitment and your influence will last for many years through your endowment. It is not only the time and the effort of trustees that is important, but the example they set for others in the support of the university. So, though we bid you fond adieu, in September, Dave, we appreciate your service and want to keep in close touch with you. 

To add to the comments made by Chair Boey, President La Tourette said, Mr. Skoien is a graduate of Colgate University and has a reputation of going back to Colgate University in New York for Homecoming every year since 1976. So it appears that he is active with his undergraduate school and very supportive. In talking to Mr. Skoien over the last couple of weeks, the President said, I get a very clear indication that, he is very supportive of education in general, he wants to make a commitment to improving higher education in Illinois, and he is very pleased with this appointment. Mr. Skoien knows a lot about Northern Illinois University and has had many complimentary things to say about the university as a result of his experience as executive director of the Capital Development Board. Mr. Skoien also has a master of public policy degree from the University of Michigan. Prior to serving as the executive director of the Capital Development Board, he worked in the Bureau of the Budget under the Thompson administration. So, he has budgeting, construction, development and entrepreneurial experience, all of which will help the university. Finally, President La Tourette said, the president of Prime Group is Mike Reschke, who is an alum of Northern Illinois University.  

I just want to echo the comments of President La Tourette and Board Chair Boey, Dr. Williams said, and add that it has been a pleasure working with you, Dave, as liaison to this committee. As chair, you have been very supportive and you have also challenged us in those cases where we needed to be challenged. I appreciate that and I extend my well wishes to you. 

I should also comment, Trustee Raymond said, that I thought it would be quite a challenge trying to chair a major committee from out of town. Working with Dr. Williams and his staff has made it much easier than I could have expected because they are real professionals. I have a high regard and great respect for all the work you do, Dr. Williams, and the contributions that you and your staff make to the university. It has made it a lot easier to be chair of this committee. Thank you for your help. 
  

Dr. Williams introduced the FY99 Internal Budget. Pursuant to Board Regulations, the internal budget is presented each year for Board approval. The tables provide delineations of NIU's appropriated budget, income fund and other nonappropriated funds that come to the university. Dr. Williams stated that the numbers show that there has been a substantial growth in the overall fund sources. The appropriations received by the university included a 3% salary increase and some program support as well as the expanded activities on the nonappropriated side, including additional bond revenue activities and local fund activities. 

Board Chair Boey said he noticed that the university income fund, as it always has been, was listed under and grouped with the appropriated fund revenues when the university income fund is primarily student tuition and fees. He asked if it would not be more appropriate to move that item under the nonappropriated revenues so that there is no confusion over what is appropriated and what is not appropriated. Dr. Williams explained that the income fund has been moved outside of the appropriated sphere and is now a local fund that is governed and controlled by the university, much like bond revenue funds, auxiliary enterprise funds, gifts, grants and other local funds. At this point in time, he said, we are still bound to report the income fund in this manner in accordance with the way the Board of Higher Education has set up the budget process. It is correct that these funds should be separated and really should be a part of the nonappropriated fund in our budget documents. Board Chair Boey suggested that the universities might try to reach some general agreement with IBHE in the future so that we are in compliance with the IBHE format, yet show the income fund as nonappropriated funds. He then called attention to the fact that if the income fund is excluded and put in the nonappropriated revenue, the true general revenue fund drops from $149 million to $102 million, which represents less than 50 percent of NIU's total budget of $256 million. The general revenue fund represents about four percent of the total budget. A hundred million dollars is still a lot of money coming from the state, Board Chair Boey said, but people have to understand that while this is called a state university, it is only supported 40 percent by state revenues, not 100 percent. This should be realized, he said, because of the pressure the public universities are under to find revenue from sources other than the state. Chair Raymond asked that, for clarity, the charts split out the university income fund so that the actual appropriated and nonappropriated fund totals are shown. Dr. Williams went on to explain that Tables, 2, 3 and 4 provided delineations of the general funds that have been provided to the university. 

Trustee Grans asked why Awards & Grants and Federal matching funds made such a large increase from $421.5 million in FY98 to $871.5 million in FY99. Ms. Kathy Swanson explained that the difference reflected the Center for Equity Services funding recently approved by the legislature, which was approved in the form of a grant. Chair Raymond asked for a motion to approve the FY99 Internal Budget. Trustee Grans so moved, seconded by Board Chair Boey. The motion was approved. 

Agenda Item 6.b. – Center for Equity Services Project Approval 

Dr. Williams said that the legislature appropriated $450,000 to Northern Illinois University for the development of a Center for Equity Services. This request was to provide a 3,400 foot extension to the existing Human Resources building for the new equity services center. Dr. Williams asked the Committee to concur in approving the project with a fixed budget of $450,000 and the appointment of Anderson Mahaffey Architects of St. Charles as the architects for the project. Chair Raymond asked for a motion approving the Center for Equity Services. Trustee Grans so moved, seconded by Board Chair Boey. The motion was approved. 

Agenda Item 6.c. – Residence Hall Master Plan – Stevenson Towers Renovation – Phase II 

This item represents the second phase of the total renovation of Stevenson Towers. Dr. Williams reminded the Board that Phase I included the renovation of Stevenson Towers North and the central core of that building. This work has been well received and appreciated by our students and staff. We are now prepared to move forward with the second phase of the work, he said, which represents the renovation and improvements of the two southern towers. The work floor plans and design, essentially, will remain much the same as Phase I. As a result of student demand for room options in Stevenson North, residence hall staff has recommended a slight modification of the floor plan to provide the double-room option, which is more preferred by students. Phase II is a $10 million project. The architectural and engineering firm will be the same one used to complete Phase I. Dr. Williams asked approval for the university to move forward with construction drawings and receiving bids on the project. 

Chair Boey said he toured Stevenson Towers North the day before it opened and was very impressed with the results. He also toured Grant Towers, which is the old design. The differences, he said, are very obvious and I have to congratulate you and your staff on the great job all of you did. I think the renovations in Stevenson Towers are well worth the money and a self-sustaining type of investment because the students are willing to pay the additional room charges that reflect the quality of the space and the design. Student Trustee Joe Sosnowski verified that there is a tremendous backlog for the new Stevenson Towers. He said the students are ecstatic about it because it is much more comfortable, there is more open space and there are fewer students per floor which makes it both safer and more of a cozy environment. In answer to a concern shown by Trustee Grans, Dr. Williams said that Phase II should be completed by this time next year. Board Chair Boey suggested that some thought should be given to doing something similar to Grant Towers. Dr. Williams said there were some infrastructure issues with Grant similar to those encountered with Stevenson and that it certainly would be a nice next step. Chair Raymond said he assumed from all the favorable comments that the university was also favorably impressed with the quality of the architectural engineering firm and the construction companies. He asked that the university stay in close touch with the students living in Stevenson Towers to see what their level of satisfaction is and whether they have any comments or constructive criticism that could be passed on for Phase II. The Chair asked how the $10 million fit within the original budget. Dr. Williams said Phase II was originally budgeted at $9.5 million. Dollars generated from investments, as well as canceling the Recycling Center project, will make up the rest of the funding. The Chair then asked for approval of Phase II of the Stevenson Towers renovation project. Trustee Grans so moved, seconded by Board Chair Boey. The motion was approved. 

Agenda Item 6.d. – One-Room School House Project and Site Approval 

This is a special request that comes to the university from alumni and other supporters of the university who have been working with NIU's College of Education concerning the relocation of a one-room schoolhouse, currently located in rural DeKalb County. Dr. Williams said they would like to relocate this one-room schoolhouse to the Odekirk property, which is owned by the NIU Foundation. As a donation to the university, it would be used in conjunction with the College of Education and its Blackwell History of Education Museum. Dr. Williams said that requirements for accepting this gift stipulated that the donors would be responsible for the total relocation, renovation and installation costs, as well as providing an ongoing source of funds that would take care of the maintenance and upkeep of the property. He said that along with Michael Malone, vice president of development, they had been able to make a positive arrangement with the donors. The university asked that the Committee endorse and accept this donation. Chair Raymond asked for a motion to endorse the acceptance of this donation. Trustee Grans so moved, seconded by Board Chair Boey. The motion was approved.  

Agenda Item 6.e. – Tuition Waiver Program for Employee Children 

This item was discussed at the Academic Affairs, Student Affairs and Personnel Committee on Thursday, August 27. Because of the financial ramifications of tuition waiver, Dr. Williams stated, this item is being repeated. He explained that the Board of Regents previously had established a policy, which carried over to this Board, allowing faculty and staff to have tuition waivers granted after three years of service. The state statute, however, requires seven years of service to qualify for this provision. Dr. Williams stated that NIU and ISU were notified by the Auditor General's staff that there was an inconsistency there. The tuition waiver policy was amended at the AASAP Committee meeting to bring NIU into compliance with the state statute. President La Tourette noted that this change will not affect any existing employee and the use of that employee's dependent waiver ability because this policy change does not take effect until January 1, 1999. The university requested that the Finance, Facilities and Operations Committee concur with the AASAP Committee's recommendation to the full Board. Trustee Grans so moved, seconded by Board Chair Boey. The motion was approved. 

Agenda Item 6.f. – DuSable Renovation Project – Phase II Approval 

This item asked approval for Phase II of the DuSable Hall Renovation Project. Phase I, allowed the university to renovate some of the classrooms, update the furniture, provide smart podia for the use of the instructors, as well as provide special areas for the students for relaxation and to prepare for classes. Phase II continues to provide those things. Dr. Williams said that the total needed to renovate DuSable Hall was around $5 million. In the absence of direct support at that level, he said, we have tried to identify priority projects that can be undertaken at this point with available. Given the success of Phase I, he said, which has been very well received, we are back to request approval of Phase II of that project to provide more improvements in that facility. Board Chair Boey asked if the funds for this project were included in the original bond money. Dr. Williams said that these funds come to us through our regular appropriation process, and the university has internally reallocated over the years to develop a fund source in general revenue to provide at least some renovation capabilities. Chair Raymond commented that this was a wonderful example of the creativity of the finance staff under Dr. Williams in achieving these very critical needs of renovation without having to go through the long legislative process that would otherwise be required. He then asked for a motion to approve Phase II of the DuSable Hall renovation project at a budget of $500,000. Trustee Grans so moved, seconded by Board Chair Boey. The motion was approved.  

Agenda Item 6.g. – Adams Hall Modifications Approval 

Adams Hall is part of the overall strategy of developing the student pipeline through the core of the campus as well as providing relocations from Altgeld Hall in order to move forward with that major renovation project. The renovated Adams Hall will accommodate the Graduate School, Sponsored Projects, Testing Services and Grants Fiscal Administration. This project was originally approved by the President back in July. We have had an opportunity to define the program, Dr. Williams said, and identify all of the things that need to be done for the relocation of these operations. Dr. Williams said the university requested approval of the Adams Hall project at $300,000 to be paid from the renovation funds previously discussed. Chair Raymond asked for a motion to approve the Adams Hall renovation project. Trustee Grans so moved, seconded by Board Chair Boey. The motion was approved. 
  

Dr. Williams reminded the Board that key transactions of $250,000 require presidential approval. Transactions above that threshold must come before the Board for direct approval. Those items as well as transactions in excess of $100,000 that received presidential approval were listed in this report. 

Agenda Item 7.b. – FY98 Annual Summary Report – Obligation of Financial Resources – Year Ending June 30, 1998 

Also required by Board Regulations, this annual summary report gives an overall picture of all financial transactions undertaken by the university during the previous year. The record showed that the majority of the 15,159 transactions were well under $100,000, only 44 were between $100,000 and $250,000, and 34 were over $250,000. 

Agenda Item 7.c. – Annual Report of Transactions Involving Real Property 

Also pursuant to Board Regulations, Dr. Williams said, the university is required to present a summary report of real property transactions. This report summarizes two land acquisitions the Board undertook during the last fiscal year, as well as those leases undertaken by the university over the same period of time. Again, the majority of the 13 leases is well under $100,000. The lease that exceeds $100,000 is a multiyear agreement, and, per Board Regulations, all the years of that lease agreement must be lumped and reported as one sum. Board Chair Boey commented that with the purchase of 32 acres of land last December, the university now has full frontage access on Lincoln Highway, which will really transform the university's visibility in the future 

Agenda Item 7.d. – FY98 Annual Report on Capital Activities 

Dr. Williams stated that Table 1 showed that bond revenue activities in FY97, which are projects that are funded through direct appropriations and other improvements that may be made through local funds, far exceeded activities through the Capital Development Board. This reflected the bond issue for the West Campus and Stevenson Towers that approximated $37 million of capital improvements. As reflected in Table 2, the bulk of those bond revenue funds went toward some new facilities as well as repair and renovation. Table 3 for FY98 showed a swing in the source of funds, Dr. Williams said, with $23.1 million shown under the Capital Development Board for the appropriation process, which is primarily Altgeld Hall. These funds were released during this fiscal year; that is what raises the state portion. Again, reflecting fiscal year projects, Table 4, showed a marked rise in the Capital Development Board projects for FY98. Again, that is Altgeld Hall and some other improvements, including storm water management, that have been appropriated over this fiscal year. Dr. Williams thanked Mr. Jim Bryant and our architectural engineering staff for this report, which covered many fiscal years and many projects. 

Chair Raymond asked about the status of the Engineering Building problems mentioned in the report, saying that some newspaper accounts of the problems said there was some indication from the Capital Development Board that the university had some responsibility in the selection of the architects and the design. Dr. Williams said they had talked to the Capital Development Board regarding Northern Illinois University's involvement in this process. Many of the problems that we are having stem from the CDB's control of the contracts and their relationships with the architects, engineers and contractors. However, what has happened in the interim, Dr. Williams said, is very positive. The executive director of the Capital Development Board contacted President La Tourette. Since their discussion, the architects, the Capital Development Board staff, and university staff met to begin to resolve some of the fairly substantial outstanding matters regarding the construction and utilization of the facility, and those items that need to be corrected. As a result of that meeting, Dr. Williams said, I think we are on a course that might at least identify what has to be done so that the facility will be totally usable and meet the original program and design. Another meeting had been scheduled with this group to further discuss these matters and to identify courses of action to resolve the issues. Dr. Williams said he would have an update at the September Board meeting. 

Agenda Item 7.e. – FY99 Increment Summary Report 

Dr. Williams stated that this item included a summary of the FY99 increment allocations pursuant to the guidelines established by this committee and reported the results of those allocations. 

Agenda Item 7.f. – Update on Major Capital Construction 

Dr. Williams gave a brief update on major capital construction, beginning with Stevenson Towers, which was a major undertaking. He thanked all those who worked together to meet the deadline so that students could move into the facility on time. It required a great deal of coordination to make this work. We cannot omit the contractor and the architects, he said. We were very hard on them, but they produced and we were very pleased with the fact that it worked. 

Dr. Williams reported that construction drawings should be completed for Altgeld Hall this fall. This is a CDB project and CDB is now working with the architectural firm negotiating contracts. It is hoped that bids can be sought in late fall or early spring for this approximately two-year project. He reported that the campus childcare facility, which is being funded through bond revenue refinance monies, is moving forward with the completion of construction documents. The goal is to have occupancy by this time next year. Dr. Williams commended Mary Crocker and Patti Perkins, who worked with Bob Albanese's staff and Jim Bryant in order to make sure that DuSable Hall was completed in time for classes this fall. Gilbert Hall will serve as a swing space for Accounting and Procurement, and the area is being modified for their relocation until Altgeld is completed. The dean of the College of Health and Human Sciences and many of their operations will be relocated to Gilbert Hall permanently. He reported that the project is going very well and commended Ms. Beth Simmons, who is coordinating that effort. Dr. Williams encouraged Board members to drive through the West Campus to see how improvements there are progressing, as well as the new gate along Annie Glidden, which is almost completed. The site for the Latino Center has been cleared and fencing put up. It is hoped that the facility will be completed and ready for use by the end of this fiscal year. Offices have been moved from the second and third floors of Williston Hall. This major undertaking has a budget of approximately $950,000. All asbestos removal has been completed and the contractor has now begun regular construction of the project.  

Agenda Item 7.g. – Year 2000 Compliance 

Throughout the country, Year 2000 compliance is a very serious matter, Dr. Williams said, and this report is a summary of information to let the Board know that the university has already taken some steps to meet this requirement. We recognize the Year 2000 compliance project is probably not the most exciting project the Board will ever read about, Vice President for Administration Anne Kaplan said, but it is one of the most critical, and we only get to do this once. She assured the board that the university has done, is doing and will continue to do the right things to get the university through the millenium in an appropriate and nondisruptive fashion. Mr. Bernard Tallman, director of Administrative Information Services and Ms. Sharon Dowen, director of Internal Audit, were mainly responsible for the report and were present at the meeting to answer questions from the Board. Chair Raymond said that based on what he had been reading in the press, particularly in Washington, it looked like NIU was far ahead of many other institutions, organizations and government agencies. This is a very complicated subject, as Dr. Kaplan said, and is not very glamorous to talk about, Board Chair Boey said, but it is a fact of life. I can tell you from sitting on other boards, including bank boards, he said, that there is a lot of uncertainty out there. The Board Chair asked if the university had identified the potential liabilities to the university in the course of the Year 2000 compliance. 

Dr. Kaplan said that Mr. Davidson in his risk management capacity, and Ms. Dowen, Mr. Tallman, Mr. Tuecke and she had had several discussions and were fairly confident that they had done the best they can to cover everything. We do not think that anything that is likely to go wrong is likely to be that important, she said, or not easily remedied after the fact. We have had some experience already with programs that have encountered year 2000 difficulties and they have been fixed with no one noticing. In answer to another question from Board Chair Boey about liabilities associated with outside sources, Dr. Kaplan said various outside providers were also being contacted for assurances from them. In some cases, those assurances have been received, and in some cases, they wiggle around a little. But from the university perspective, she said the important thing is that the university took the initiative to pursue the assurances, and that is happening. Board Chair Boey asked that staff advise the Board more frequently on compliance in summary form as we near the year 2000. Chair Raymond said that based on what he had read and heard about the way other organizations are approaching this, it looks like NIU is approaching it in exactly the right way and very appropriately. And as Chair Boey indicated, he said, there is a lot of uncertainly and you are probably not going to know until you get to the day. Chair Raymond also asked whether or not installation of the new Human Resources system would complicate compliance in any way. Mr. Tallman said that the Human Resource system being acquired from PeopleSoft to complement current financial systems would be fully Year 2000 compliant. The system currently being used has been modified and is in its final stages of systems testing, which should be completed by October 1 or earlier, so that it will also be Year 2000 compliant.  

Agenda Item 8 – Legislative Report 

Ms. Kathy Swanson briefly highlighted legislation that the Governor had signed since the June Board meeting. He approved the matching grants program, which would be available to public universities and private universities in the state along with a $10 million appropriation to be used as an incentive match to obtain additional federal grants, research grants, for public universities. The Governor also signed the teacher certification legislation sought by NIU music and art faculty. There was a problem with the original package that was passed about a year and a half ago on teacher certification as part of the global education elementary ed reform package, Ms. Swanson said, and music and art faculty here at NIU drew this to our attention. She said they worked with Senator Cronin and Senator Berman in Springfield and with the IEA and some of the other unions to successfully address those concerns. The student trustees now have the right to a vote on the public university governing boards. That act sunsets July 1, 2001. 

The Graduate Incentive Program was also signed by the Governor. Mr. Swanson said this was legislation sought by Western Illinois University to recognize their contractual program with incoming freshmen. At Western a student can sign a contract with the school for four years under certain terms taking certain courses and the school will guarantee that the student will be able to finish in four years and guarantee that those courses will be offered so the student will be able to complete that program. However, there was no funding attached to this incentive program. The Board of Higher Education will begin to look at this issue in the coming year to decide how much funding should be available for that program and present it to the governor for budget recommendations in the future. Ms. Swanson said that President La Tourette had spoken at length with several student groups on campus and there was an article on this subject in the Northern Star. This would be a very difficult program to implement at Northern, she said, because of the differences between the student bodies at NIU and Western. We feel that the tuition program initiated and adopted by our Board of Trustees is a far better mechanism for students here at Northern, Ms. Swanson said. 

President La Tourette said it was important for the Board and others to understand why NIU was so interested in changing its approach to tuition when compared to these four-year contracts. Looking at NIU's student body, this year, which is also representative of the last few years, he said, there will be about 4,900 new undergraduate level students coming into the university. Out of that number, 2,200 are transfer students, not freshmen, and could not be included in one of these four-year contract plans. There are approximately 500 other students in a special category admitted as freshmen, who are explicitly advised not to take more than 12 hours per semester in their first year. That means fifty-five percent of the students who enter NIU each year would not be eligible for one of these four-year plans. Therefore, the administration felt it had to find some other approach to the issue of degree completion, which would give all students, no matter how they enter the university, an opportunity and the encouragement to finish more rapidly. 

One of the problems with the four-year plan is that it was introduced by private colleges where most of the students are 18 to 22 years old and enter as freshmen, the President said, and they are more homogeneous in terms of student body than here at NIU. To answer a question from Chair Raymond, President La Tourette said that Western is much more homogeneous because they have very few commuters. He emphasized the fact that slightly more than 40 percent of NIU's undergraduates do not live in DeKalb County at the present time. Fifty-one percent of NIU's law students and 70 percent of NIU's graduate students do not live in DeKalb County. So, we are quite different from a small, private, four-year liberal arts school, which might find one of these four-year programs very attractive, the President said. Also, because of its location, Western Illinois University implies that more students are going to be residential. These four-year contracts have less meaning for institutions in the suburban and metropolitan areas because they contain more nontraditional students not entering as freshmen. NIU was trying to find a program that could be extended to all students, he said, with a philosophy of encouraging students to take that extra course, no matter how they entered the university, so that they could finish more rapidly than they have in the past. 

Board Chair Boey asked why, if Western was unique in the sense that they alone seem to have the highest percentage of freshmen starting there, a state law was passed applying to just one university. President La Tourette said that NIU has been the largest institution with a large number of transfers from community colleges in the state for a number of years and hoped the IBHE would take a broader view of this issue and look at incentives for other students. Chair Raymond asked if the new legislation was limited to this type of four-year contractual arrangement. Both President La Tourette and Ms. Swanson said it was difficult to tell because the language was very vague. Ms. Swanson said, as President La Tourette had pointed out, that the key will be in the administrative rules or parameters set by the Board of Higher Education when they implement this currently unfunded program. It is not known how much the Board of Higher Education will decide to allocate to the program as part of the budget process. One public university, such as Western, which has this program, will benefit significantly. Most of the other public universities have a different type of student body and will not benefit as significantly, Ms. Swanson said, so I imagine the Board of Higher Education will take all that into consideration when deciding how much budgetary funding they should recommend to the Governor. 

Chair Raymond asked if he was correct in assuming that the benefit eventually would be in the form of funding to the universities that qualified. Ms. Swanson said it was to be a grant program that is set up for the universities, not to the individual students, and it was expected to be a fairly minimal program in overall funding. Because there are so many other programs that other universities are implementing, she said, unless they define it rather broadly within the administrative structure, it was doubtful that significant amounts of funds would be generated for it. Chair Raymond asked if it was possible that NIU's new tuition plan could qualify under this program. Ms. Swanson said the university would be working with the Board of Higher Education IBHE on the budget process and would take this issue up with them in their Big Picture Meeting. The public universities are going to try to have it defined as broadly as possible because each school has a unique culture and student needs to be addressed. All the presidents and administrations are focused on trying to find ways to get students through in the minimal amount of time. she said, so the broader they can define that, the better off we are going to be as publics. 

Another issue brought to the Board's attention was the Year 2000 (Y2K) Technology Task force Act that was signed by the Governor. Following up on Dr. Kaplan's report on the Y2K situation here, Ms. Swanson said the state has finally addressed this issue. They are putting the policymakers on notice and asking agencies throughout the state to report on what they are doing to become compliant with Year 2000 rules. This was a big issue because very little additional funding has been made available. It had not really been a priority of state policymakers before this legislation passed. Recognizing this, the Governor appointed a group of legislators to a Task Force on Year 2000 compliance. They are to have preliminary reports and recommendations by November for the new General Assembly to act on in January. 

Ms. Kathryn Swanson reported that the State of Illinois Economic and Fiscal Commission had released its 1998 general funds revenue five-year outlook. Basically, this is an economic forecast of where we stand from the Eck & Fisk Commission's perspective on incoming revenues for this year and for the coming five years, she said. They are expecting $1.3 billion in new revenue growth this year. However, despite the fact that Eck & Fisk ran three different economic forecast scenarios, she said, the Board should be aware that all three scenarios show a significant drop in expected general revenue funds for next year. These forecasts are very early, however, and subject to change. The Bureau of the Budget will put out a separate set of scenarios that will probably be a little bit more optimistic. Eck & Fisk has a tendency to be a bit more conservative in their economic forecasts. But, generally, Ms. Swanson said, this information is the information that the legislature uses when they decide how much of the Governor's budget request they are going to honor because this is their agency. No matter what scenarios they used, she said, all of them had a significant drop in revenues next year due to several pieces of legislation enacted this year that will impact our revenue string for next year. In reply to a question from Trustee Grans, Ms. Swanson said the legislators cited such things as cigarette and message taxes that went into effect this year and the restructuring of the riverboat gambling tax, which gave us additional revenues this year. However, the things that will decrease future growth rates are the personal exemption doubling over three years, the transition to the apportionment of the business income tax using a single sales formula, and the personal income tax refund percentage increase this fiscal year resulting in a lower net income tax growth rate for next year.  

The Procurement Policy Board has now been created and has held two meetings. Ms. Swanson said the university also has been working very closely with the chief procurement officer, Dr. Craig Bazzani from the University of Illinois, in an attempt to focus on some of the problems the higher education community is having in complying with all of the new procurement regulations. The Procurement Policy Board has been trying to orient itself by looking at the differences in the law prior to its passage and as it is now. Ms Swanson said Dr. Bazzani's staff has been working very closely with the procurement people at all the public universities in an effort to gain this information and set up a matrix for the Procurement Policy Board. Dr. Bazzani has forwarded a cost estimate of the actual impact the procurement regulations will have on higher education to the Procurement Policy Board. The initial cost, including nonrecurring startup costs, was estimated at about $2 million to $2.5 million. It is expected to be $1.9 annually to $2 million annually thereafter.  

In addition to that, he has put together some charts based on the administrative and loss of time costs with the new selection procedures and sole-source processing. Adding those new categories to the things we did not have to do prior to the passage of this legislation, Ms. Swanson said, totals almost $12 million of ongoing administrative and loss-of-time costs. So, it does have a fiscal impact, she said, and I am optimistic that the board will address some of these issues and provide us some relief within their own authority to help us statutorily change the law with the cooperation of the legislature. It is possible that some of these issues will come up in the Veto Session and the Spring Session of the legislature. 

In answer to a query from Chair Raymond, Ms. Swanson said the board was expected to decide at their October meeting on what recommendations it would make to the legislature. Because the board members all have other jobs and there is no staff right now to handle these matters, she said, we do not know whether they will be able to sift through all this material and be in a position to offer legislative guidance as early as the Veto Session. It depends on whether we can get a short list and deal with some of the more complex problems later. Chair Raymond and Board Chair Boey both commented that the impact analysis was very significant and frightening.  
  

Chair Raymond noted that the Board would finish its public business at the end of this current meeting agenda and would adjourn after completion of the approved closed meeting. 
  

The public meeting was recessed at 12:15 p.m. 

Chair Raymond asked for a motion to adjourn the public meeting of the Committee. Trustee Grans so moved, seconded by Board Chair Boey. The meeting was adjourned at 2:11 p.m. 
  
  
Respectfully submitted, 

Sharon M. Mimms 
Recording Secretary